Imagine the freedom to work from anywhere in the world, to be your boss, and to make money doing something you love. Sounds tempting! Starting an ecommerce business can give you all of that and more. With the right strategy and dedication, you can build a successful online store offering a steady income.
There is work to be done, though. Starting up a successful online store involves more than setting up a database and throwing products for sale on it – if you want to succeed, there is a format to follow and some vital decisions to be made.
To start with, let’s get clear on exactly what we mean by an ecommerce business.
An ecommerce business refers to an online store that focuses on sales for specific products or services to customers over the internet rather than face-to-face in a traditional brick-and-mortar store.
An ecommerce business can take many forms. It could be a one-person operation selling handmade homeware items. Or be a multi-million dollar enterprise selling many products. The one thing these businesses all have in common? They sell online.
The key to success in ecommerce is simple: understand your target market, work out what they want, and provide them with it. Researching the competition, understanding customer needs and wants, and creating the perfect product or service that meets those needs and wants are all vital.
Steps to Starting an Ecommerce Business
Now that you know what an ecommerce business is, let’s look at the steps you need to take to get started.
Choose Your Niche
The first and most crucial step in starting your ecommerce business is deciding what type of products or services you want to sell. Otherwise known as your niche, this forms the basis of your business. It is vital to choose something that you’re passionate and knowledgeable about and a product or service that you know will bring in profit.
Some of the elements that can help you choose your specific niche include the following:
Your Areas of Expertise: Consider the areas you already have knowledge of and a strong background in to help you make informed decisions based on real-world knowledge. Understanding the value of specific markers means you are less likely to make a potentially costly mistake. Think about your target market and what type of products or services they might be interested in. Doing so will help you to focus on the right niche.
Research Your Competition
Once you’ve chosen a niche, it’s time to research the competition. Look at what other e-commerce businesses are doing in your niche. Consider what they are doing right and where they can improve. What prices are they charging, and is it popular? Considering these questions will help you create a better product or service and give you an edge over the competition, allowing your business a better chance of success.
Create Your Business Plan
Next, create an ecommerce business plan – this document will form a core element of your business. Include a detailed description of your product or service, pricing information, marketing strategies, and financial projections. Essentials that your business plan should incorporate include:
Description of Your Products or Services: Your business plan needs to include a detailed description of what you plan to offer in your business. Examples are information about pricing, features, and any other relevant details.
Marketing Strategy: Your ecommerce business plan should also include a section on your marketing strategies. Include information about how you plan to reach your target market and any promotional activities that you plan to undertake to promote your business and brand.
Financial Projections: You should also include financial projections, helping you understand the costs associated with running your ecommerce business and creating a budget for your business. It can also help you project profit and loss.
Choose Your E-Commerce Platform
Once you’ve created your business plan, it’s time to choose the platform that you’ll use for your ecommerce business. There are several different e-commerce platforms available – research each one and find the one that best suits the needs of your business.
Some of the most popular platforms typically chosen for e-commerce stores include:
Shopify: Shopify is one of the most popular ecommerce platforms, and it’s easy to see why. It offers plenty of features and tools that make setting up an online store quick and easy. Shopify also has a range of payment options, making it easy for customers to pay for their purchases.
WooCommerce: WooCommerce is another popular platform, and it’s an excellent choice for businesses aiming to integrate with WordPress. It offers various featured tools, making it easy to customize your store to make it look professional. It integrates with WordPress seamlessly.
BigCommerce: BigCommerce is another popular choice and works well for those who want to create an online store with advanced features. It offers a range of features like product management, order management, and analytics, making it easier to keep track of your business figures.
Set Up Your Store and Website
Once you’ve chosen an e-commerce platform, it’s time to set up your store and website. Setting up your store will require you to create product pages, set up payment options, and configure any extra features you plan to use as part of your business.
You will also need a website to promote your brand and attract customers – this requires a domain name, logo, and design of the layout of your site. You’ll also need to decide what payment processor you want to use and how to handle shipping and returns – many platforms will take care of this for you.
Choosing A Domain Name: Your domain name is the address of your website, and it’s vital to choose one that reflects your business, is catchy, and will be easy for customers to associate with you and remember.
Creating A Logo: Your logo is a vital part of your brand. It should reflect the values and mission of your business.
Choosing The Layout Of Your Site: The layout of your site is imperative as it will determine how easy it is for customers to find what they’re looking for. Make sure you take the time to create an intuitive and user-friendly layout.
Choosing A Payment Processor: A crucial decision for any ecommerce business is choosing a payment processor – this is how you get paid. Make sure you find a provider offering the features and security you need. Popular options typically include providers such as PayPal, Stripe, and Square – you can also use a combination of these for maximum flexibility.
Setting Up Shipping And Returns: Shipping and returns are a vital part of any ecommerce business and will involve researching different shipping options, setting up a returns policy for customers to follow and creating a system for tracking orders. You will also need to decide how to handle shipping costs.
Promote Your Store
Once you’ve created your store, it’s time to promote it.
There are several marketing tools and techniques that you can use to promote your e-commerce store, and some of the most effective include:
Social Media Marketing: Social media is a great way to reach potential customers and maintain existing relationships. You can use social media channels such as Facebook, Twitter, and Instagram to share updates about your business, promote products, and engage with customers.
Email Marketing: Email marketing is effective to reach previous customers and helps to keep them informed about your business, as well as build loyalty and increase the chance that a customer will return. Make the most of emails to send newsletters about new products or promotions, offer vouchers and discounts to loyal customers, and build long-term relationships.
Social Media Ads: Social media ads can also reach potential customers and drive traffic to your store. You can use platforms such as Facebook, Twitter, and Instagram to create targeted ads that will help you reach new customers.
Choosing A Product To Sell
When it comes to a successful ecommerce site, a vital decision you will make is deciding what to sell. When chosen correctly, this is the foundation of a profitable business and will determine its success. You will need to take into the following factors into account:
Choose Something You Know
If you have expertise in a field, it’s easier to market and sell products related to this, as you will know exactly how it works. You’ll also understand the benefits and applications and likely have contacts and connections who can help you to access great deals and discounts.
As well as knowledge of your product, you should choose something you are passionate about. If you have a genuine interest in the product, it will be easier to market and sell it, as your enthusiasm will come through in your messaging and help to engage new customers. Opting for a product that is likely to be successful but in which you have no knowledge or interest is unlikely to be successful in the long run.
Choose Something With High Demand
When selecting a product, ensure its demand is high enough, as this will determine whether your business is viable. You can research potential products by looking at social media trends and using tools such as Google Trends to see what people are searching for.
It is also imperative to ensure that your chosen idea is profitable. Research the market and find out what the competition is doing, and look at pricing and margins. You should also consider any additional upfront costs associated with selling, such as shipping or packaging.
Which Products Are The Best Pick For An E-commerce Store?
The best product ideas to sell in an ecommerce store depend on your online business, but some industries tend to sit at the higher end of the profit margin. These include the following:
Electronics
Electronics have long reigned supreme in the ecommerce world, which is unlikely to change anytime soon. With the ever-evolving technology landscape, new products are constantly released. Customers are eager to get their hands on them, allowing business owners to take advantage of the latest trends and capitalize on them for maximum profit.
Clothing
Clothing is another popular choice for ecommerce businesses, as it is a product that customers are always looking to buy. If you pick the right product, you will have constant demand. With the right marketing strategy, you can find your perfect audience, target specific demographics and create a loyal customer base who will keep coming back for more.
The trick with a clothing ecommerce store is to ensure you keep a close eye on the latest trends, styles, and fashions. This will help ensure that customers keep returning to bring about a profitable online store.
Jewelry
Jewelry is another popular choice for ecommerce businesses. It can be sold at a premium price and can capture repeat customers – if you can offer something great the first time, chances are high that you will see the customer time and again.
It is vital to ensure that you offer quality jewelry at competitive prices and have a wide selection of styles and designs available. Additionally, ensure you know the applicable laws and regulations regarding jewelry sales, as these can vary from country to country.
Home Decor
Home decor is another popular choice for ecommerce businesses, as it allows customers to personalize their living spaces with unique and stylish pieces. Home decor can range from furniture to artwork, and it is a broad marketer with a wide selection of products available for customers.
You can specialize in a particular style or range of products or offer a wide selection to cater to different tastes and budgets. The key is to offer a good choice of quality products at competitive prices compared to other suppliers, as this will promote return customers.
Pet Products
The pet market is another lucrative industry for ecommerce businesses, as customers are always looking for the latest products to keep their furry friends happy and healthy. Pet products can range from food and treats to toys and accessories. You can also branch out into personalized or customized items.
According to experts, most households can spend around $770 (in 2021) on their pets in a single year, and the sheer number of pet owners in the world means that this has the potential to be a lucrative market.
Health and Fitness
The pandemic has resulted in a sharp rise in individuals looking to take their health, fitness, and general well-being more seriously. There is a massive demand for health and fitness products, from supplements to gym equipment.
With a health and fitness ecommerce store, you can offer customers a wide selection of products to help them reach their goals and provide advice and support along the way.
Another long-term effect of the pandemic is a rise in the number of people working from home, creating a great demand for office equipment, including anything from desks and chairs to stationery and tech accessories. Office equipment can be a lucrative way to tap into the growing market of remote workers.
Keep it simple with basic desks and office supplies, or improve your offerings by combining office equipment and home decor. Focus on helping workers to create a stylish and functional workspace – this is a rapidly growing area, and you are guaranteed to find plenty of keen homeworkers looking to snap up your supplies.
Beauty Products
Beauty products are another popular option, and customers are always looking for the latest products to help them look and feel their best. In 2021, e-commerce revenue from personal care retail sales in the United States reached an incredible $54 billion. This accounts for 11% of total U.S. retail e-commerce sales this year – a figure that is only increasing due to improved internet access and digital connectivity worldwide. It’s clear that web sales are becoming a dependable form of income for beauty and personal care companies across America. Getting into this market now could prove a profitable decision for your future.
Beauty products can range from makeup and skincare to haircare and fragrances, and you can also offer a range of accessories such as brushes, sponges, and applicators.
When selling beauty or skincare products, always make sure that you are aware of applicable laws and regulations and the ingredients used in each product. Also, ensure that you have any necessary certifications in place.
Setting Up An E-commerce Business: Managing Finances
As with any business, there are financial considerations that you will need to keep in mind when getting started and running your store.
Initial Capital
You will need to have enough capital to cover the costs of setting up your ecommerce store, such as web hosting, domain name registration, purchasing and storing stock, and other fees associated with running an online business. You could source this through personal savings, loans, or investments.
Taxes
Ensure that you are aware of the tax requirements for your ecommerce business and area and that you comply with all applicable laws. This could include registering for a sales tax permit and filing taxes regularly.
Accounting
It is vital to keep track of your finances and ensure that you have accurate records of all transactions – staying on top of this will help you to manage your ecommerce business more effectively and reduce the risk of issues down the line. Consider using accounting software or hiring an accountant to help with this, as this will ensure that your books are always up-to-date and that you follow all legal and taxation requirements.
Stock or Inventory
As noted, if you are selling physical products, you will need to make sure you have enough stock or inventory to meet customer demand. You should also consider any storage costs associated with this.
Business Bank Account
Have a separate business bank account for your e-commerce business. It will help you keep track of your personal and business finances and ensure that all transactions are accounted for with total transparency. Do your homework before settling on a particular bank – there are typically several deals and extras that can be beneficial for ecommerce businesses, such as reduced business tax or access to other products – these can help to save you money in the long run.
Business Licenses
Depending on the type of products or services you sell, you might require business licenses or permit. Make sure that you research this thoroughly and ensure that you have all the necessary paperwork in place before launching your own ecommerce business. Depending on your industry, these can occur at an additional expense – make sure you can cover this ahead of launch.
Marketing and Promotion
Both marketing your store and setting up a platform need to be included in your financial planning. Make sure you budget for any digital marketing activities you plan to undertake, such as advertising or promotional campaigns.
Don’t underestimate the importance of marketing – this is your chance to start a conversation with your potential customers and form key elements of building a brand that is recognized, trusted, and returned time and again.
How To Build A Brand For Your Ecommerce Business
As noted, a key factor in succeeding as an ecommerce business is building a strong brand – especially if you are targeting a saturated industry. It will help you to stand out from the competition and create an identity that your target audience can recognize and trust. Here are some tips for building a successful brand:
Develop A Unique Brand Identity
Your brand needs to be unique and recognizable: think about what makes your business different from others in the industry. Your “brand identity” refers to the look and feel of your business, from the logo to the business website design.
Take some time at the start of the process to sit and consider the elements that make up your brand identity.
What do you offer that is unique in the market?
Do you have access to quality products, practical items essential in everyday life, or a reputation for offering that extra touch?
Are you defined by your bargain prices or quality products and customer service?
Are you positioning yourself in the budget market or aiming for high-end luxury?
How do you want your audience to think of you?
Why should they trust and choose you?
Answering these questions will help you to create a unique brand identity that will outperform the competitors and will go a long way towards ensuring that your brand messaging is clear, consistent, and recognizable.
Create a Logo
Your logo visually represents your brand, and it’s vital to get this right. It should be simple, memorable, and instantly associated with you – think of iconic logos like Nike or Apple. A logo is a key form of communication with your target audience – focus on aligning it with your brand values and identity.
You can create a logo using online tools such as Canva or Adobe Illustrator or hire a professional designer to make one for you.
Develop a Brand Voice
Your brand voice is the tone and language you use to communicate with your customers. It should be consistent across all channels to create a recognizable identity for your business.
Don’t forget to establish a brand story – this refers to the narrative you use to explain who you are and what you do. It should be engaging, authentic, and memorable – think of it as a way to connect with your customers on an emotional level.
Focus on Quality Content
Content is vital to build a successful brand – make sure that you are producing high-quality content that interests your target audience. Include blog posts, videos, or other forms of content to engage customers and build your brand.
Social media helps you reach potential customers and build relationships. Make sure you are active on the relevant platforms for your ecommerce business and use them to promote your products and services.
Build a Website
We have discussed the importance of your website; this is the foundation of your e-commerce business and must be easy to navigate, visually appealing, and optimized for search engines. You should also make sure that it is mobile-friendly, as many customers now use their phones and tablets to shop online.
Invest in SEO
Search engine optimization (SEO) is vital for any e-commerce business. It will help ensure that your website is visible in search engine results, driving more traffic to your site and increasing sales. Optimize your content for the right keywords and use relevant tags and meta descriptions on each page to maximize online sales.
Why Start An E-commerce Business? What Are The Benefits?
You may wonder what benefits you can enjoy from an e-commerce store. There are plenty of advantages, and a key appeal is the low start-up costs.
Unlike brick-and-mortar stores, starting an e-commerce business requires minimal start-up costs while still allowing you to reach a much larger audience compared to a physical store, including customers from all over the world.
An online store is also much easier to scale than a physical store, as you can add more products and services without needing to invest in additional space or staff.
Flexibility is another major appeal; an e-commerce business allows you to work from home or anywhere in the world and set your hours. You will have more flexibility and control over your life and schedule.
Despite the numerous benefits, there are some risks to be aware of when starting an e-commerce business.
Competition: The biggest issue you are likely to encounter is competition; unsurprisingly, the online marketplace is difficult to stand out from the crowd. Make sure that your products and services are unique and offer something that other businesses don’t – this is where good product research and knowledge of your industry come in handy, as this will be the difference between a business that works and struggling to make a profit.
Technical issues: As with any online business, there is always the risk of technical issues like website downtime or slow loading times with an e-commerce store. Make sure that you have a reliable hosting provider and that your website is regularly tested and updated.
With our ultimate guide, you can get started on the right foot and build a successful e-commerce business that stands the test of time and grows from strength to strength – all you have to do is get started.
8-figure Amazon seller and serial online entrepreneur since 2015. Research and practice various online business models, and apply his in-depth learnings to further expand and grow his businesses as well as help others to achieve greater successes. Ex-VP of a high tech VC in Vancouver and a Management Consultant with over a decade of experience in the industry. Master's Degree from HEC Paris.
